ENDORSEMENT NO. 2
Attached to and made a part of
AGREEMENT OF REINSURANCE
NO. 8295
between
GENERAL REINSURANCE CORPORATION
and
AMERICAN COMPENSATION INSURANCE COMPANY
IT IS MUTUALLY AGREED that, retroactive to the inception of this Agreement,
the first paragraph of ARTICLE XIII - CONTINGENT COMMISSION is amended to read:
IT IS FURTHER AGREED that, effective 12:01 A.M., January 1, 1999, this
Agreement is amended as follows:
I - As respects losses resulting from occurrences taking place at and after
such time and date, ARTICLE IV is amended to read:
"ARTICLE IV - LIABILITY OF THE REINSURER
(a) Under Cover A, the Reinsurer shall pay to the Company, with respect to
worker's compensation and employers' liability business of the Company,
the amount of net loss each occurrence, other than non-sudden and
accidental occupational disease, in excess of the Company Retention but
not exceeding the Limits of Liability of the Reinsurer as follows:
The Company Retention shall be $300,000.
The Limits of Liability of the Reinsurer shall be for the:
(1) First Excess Cover, $700,000 excess of $300,000;
(2) Second Excess Cover, $9,000,000 excess of $1,000,000;
(3) Third Excess Cover, the difference between statutory limits and
$10,000,000. However, under this Third Excess Cover, the
Reinsurer's liability as respects each earthquake occurrence shall
not exceed $20,000,000.
For purposes of this provision, the term "earthquake occurrence"
shall be deemed to mean an occurrence or series of occurrences
arising out of one earthquake, including fire following directly
occasioned by the earthquake, provided that only the claims and
losses sustained by the Company during the continuous period of
168 hours selected by the Company shall be used in the
determination of the net loss; and only one such continuous period
of 168 hours shall apply with respect to one earthquake.
(b) Under Cover B, the Reinsurer shall pay to the Company, with respect to
non-sudden and accidental occupational disease, the amount of net loss
each occurrence which is first reported by the Company to the Reinsurer
while this Agreement remains in effect in excess of the Company
Retention of $300,000, but not exceeding the Limit of Liability of
the Reinsurer $19,700,000. Further, the liability of the Reinsurer
shall not exceed $19,700,000 with respect to all occurrences first
reported by the Company to the Reinsurer during any one calendar year
that this Agreement remains in effect.
II - As respects losses resulting from occurrences taking place at and
after such time and date, the first paragraph of ARTICLE V - LOSS IN
EXCESS OF POLICY LIMITS is amended to read:
"Notwithstanding the provisions of the article entitled MANAGEMENT OF CLAIMS
AND LOSSES, if a third party claimant is awarded an amount in excess of the
Company's policy limit and, as a result of the Company's or RTW's failure to
settle within the policy limit or of the Company's or RTW's alleged or actual
negligence or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against its insured or
in the preparation or prosecution of an appeal consequent upon such action, an
action is taken by the insured or assignee which could impose legal liability on
the Company for an amount in excess of the Company's policy limit, 95% of that
portion of the award made to the third party claimant which is in excess of the
Company's policy limit shall be added to the Company's net loss from the
occurrence and the total shall be allocated in accordance with the
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article entitled LIABILITY OF THE REINSURER. However, in no event shall the
Reinsurer's liability for any loss in excess of the Company's policy limit
exceed 95% of $10,000,000."
III - As respects losses resulting from occurrences taking place at and
after such time and date, the first paragraph of ARTICLE VI - EXTRA
CONTRACTUAL OBLIGATIONS is amended to read:
"Notwithstanding the provisions of the article entitled MANAGEMENT OF CLAIMS
AND LOSSES, if the Company incurs an extra contractual obligation, 95% of the
extra contractual obligation shall be added to the Company's net loss from the
occurrence and the total shall be allocated in accordance with the article
entitled LIABILITY OF THE REINSURER. However, in no event shall the Reinsurer's
liability for any extra contractual obligation exceed 95% of $10,000,000."
IV - The third paragraph of ARTICLE VII - COMMENCEMENT AND TERMINATION
OBLIGATIONS is amended to read:
"Either party may terminate this Agreement at December 31, 2000 or any
subsequent December 31st, by sending to the other, by registered mail to its
principal office, not less than 90 days prior written notice."
V - As respects losses resulting from occurrences taking place at and
after such time and date, ARTICLE VIII is amended to read:
"ARTICLE VIII - COMPANY POLICY AMOUNTS
For the purposes of determining the Company Retention and the Limits of
Liability of the Reinsurer, the limits of liability of the Company with respect
to any one policy shall be deemed not to exceed:
(a) Workers' Compensation Statutory
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(b) Employers' Liability
(1) Bodily Injury by Accident $5,000,000 each accident
(2) Bodily Injury by Disease $5,000,000 policy limit
(3) Bodily Injury by Disease $5,000,000 each employee"
VI - As respects losses resulting from occurrences taking place at and
after such time and date, the second paragraph of paragraph (d) of
ARTICLE IX - DEFINITIONS is amended to read:
"This term shall include declaratory judgment expense incurred by the
Company in contesting insurance coverage on the policies covered
hereunder. However, in no event shall the Reinsurer's liability for
any declaratory judgment expense exceed $5,000,000."
VII - As respects losses resulting from occurrences taking place at and
after such time and date, ARTICLE X is amended to read:
"ARTICLE X - EXCLUSIONS
This Agreement shall not apply to:
(a) Business accepted by the Company as reinsurance from other insurers
other than its affiliates and through a Specific Retrocessional
Agreement No. 2073 between the Company and the Reinsurer;
(b) "Self-insurance" or "self-insured obligations", howsoever styled, of
the Company, its affiliates or subsidiaries, or any insurance wherein
the Company, its affiliates or subsidiaries, are named as the insured
party, either alone or jointly with some other party, notwithstanding
that no legal liability may arise in respect thereof by reason of the
fact that the Company, its affiliates or subsidiaries, may not be
obligated by law to pay a claim to itself, its affiliates or
subsidiaries;
(c) Any loss or liability accruing to the Company directly or indirectly
from any insurance written by or through any pool or association
including pools or associations in which membership by the Company is
required under any statutes or regulations; however, this exclusion
shall not apply to the Company's involuntary participation in assigned
risk plans in so far as the class of business is one written by the
Company;
(d) Any liability of the Company arising from its participation or
membership in any insolvency fund;
(e) Insurance with respect to operations involving:
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(1) Aircraft flight operations or operations in which the flying
hazard is a major part of the insured's operations;
(2) Manufacturing, packing, handling, shipping, or storage of
explosives, substances intended for use as an explosive,
ammunitions, fuses, arms, magnesium, propellant charges,
detonating devices, fireworks, nitroglycerine, celluloid, or
pyroxylin; however, this exclusion shall not apply to the
incidental packing, handling or storage of same in connection
with the sale of such substances. Firearm manufacturing shall
not be excluded;
(3) Gas companies, dealers, or distributors, except those in the
gasoline service station business; oil or gas operators, lease
operators or contractors; oil or gas well works; oil or gas
pipeline construction or operations; oil rig and xxxxxxx work;
onshore or offshore gas or oil drilling operations. Gasoline
hauling shall not be excluded if the insured's primary operation
is retail gasoline distribution and the tankers are used to
distribute to the risk's own locations only;
(4) Production, refining, handling, shipping or storage of "flammable
liquids" or "flammable gases" as defined by the National Fire
Protection Association; however, this exclusion shall not apply to
the incidental handling or storage of same in connection with the
sale of such substances;
(5) Railroad operation or construction of railroads;
(6) Maritime or federal employments; steamship lines, agencies, or
stevedoring, navigation or operation of vessels; operation of
drydocks; marine wrecking; and including all United States
Longshoremen's and Harbor Workers' exposures except as incidental
and necessary to the primary operation;
(7) Sewer and subway construction, shaft sinking, or tunnelling;
(8) Wrecking or demolition;
(9) Underground mining, strip mining, or quarrying;
(10) Off-shore or subaqueous work;
(11) Caisson or xxxxxx dam work; dam, dike, lock or revetment
construction;
(12) Chemical manufacturing, which includes the following class codes
promulgated by NCCI. In the event the NCCI class
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codes don't apply, the corresponding state specific code is
excluded. Any new codes developed by combining or subdividing
these codes are also excluded:
4536 Acid Mfg.
4585 Ammonia Mfg.
4586 Ammonium Nitrate Mfg.
4741 Asphalt or Tar Distilling or Refining
4828 Chemical Blending or Mixing
4829 Chemical Mfg. NOC
4703 Dextrine Mfg.
1472 Distillation - Wood
1474 Distillation - Wood - Destructive Process & Drivers
2130 Distillery - Spiritous Liquor
4771 Explosives or Ammunition Mfg. NOC
4583 Fertilizer Mfg.
4653 Glue Mfg.
4557 Ink Mfg.
4439 Lacquer or Spirit Varnish Mfg.
4740 Oil Refining - Petroleum
4558 Paint Mfg.
Pulp Mfg. - Chemical Process
4758 Rocket Engine Ignitor Mfg. & Drivers
4759 Rocket Engine Mfg. - Solid Propellant & Drivers
4720 Soap Mfg.
4751 Synthetic Rubber Mfg.
0000 Xxxxxxxxxx or Resin Mfg.
4561 Varnish Mfg.
2416 Yarn Dyeing or Finishing;
(13) Nuclear Regulatory Commission projects or operations conducted
under license from the Nuclear Regulatory Commission;
(14) Asbestos removal;
(15) Firefighters and police officers including armed security guards.
If the Company provides insurance for an insured with respect to any
operations listed in exclusion (e), except exclusions (e)(2) and (e)(4), and if
such operations constitute only a minor and incidental part of the total
operations of the insured, such exclusion(s) shall not apply. Minor and
incidental is defined as 10% or less of the total premium for the account.
If the Company is bound, without the knowledge of and contrary to the
instructions of the Company's supervisory underwriting personnel, on any
business falling within the scope of
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one or more of the exclusions set forth in this Article these exclusions, except
(a) through (d), (e)(2) and (e)(3) shall be suspended with respect to such
business until 30 days after an underwriting supervisor of the Company acquires
knowledge of such business."
VIII - As respects new and renewal policies of the Company becoming effective
at and after such time and date and policies of the Company in force
at such time and date, ARTICLE XII is amended to read:
IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be
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executed in duplicate,
this 6th day of JANUARY , 1997,
GENERAL REINSURANCE CORPORATION
/s/ Xxx Xxxxxxx
-----------------------------
Vice President
Attest: /s/ X.X. Xxxxxxx
-----------------------------
and this 15th day of January, 1999.
AMERICAN COMPENSATION INSURANCE
COMPANY
/s/ Xxx X. Xxxx
-----------------------------
Attest: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
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